Tax Law (Questions About Taxes)/tax on gift of equity


I am a builder, selling a new home for cost to my son. The gift of equity is $35,000 and is his down payment for his loan.
I understand that my LLC will receive a 1099 from the title company that includes the value of the gift. What can I do to avoid taxes on this item?


Thanks for your question.  There are a couple of issues here, but there should not be any tax effects.  It gets a little complex, however.

In regard to the 1099, just show that amount as income and deduct your cost as an expense or sale of inventory.  Since you are selling it to him for your cost, that should be a breakeven.

The second issue is that of the gift tax.  Since the gift exceeds the annual exclusion of $14,000 a gift tax return may need to be filed.  However, if you and he are both married, you can give up to $14,000 to him and the same amount to his wife.  Likewise, your wife can do the same.  If you are going this route, you are gift-splitting and will have to file a gift tax return, but no tax would be involved.

If one of you is not married, you can just file a gift tax return, take the annual exclusion and apply the excess to your lifetime exclusion and pay no tax.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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